LATIN AMERICA — Geomaque lowers costs at San Francisco mine

With year-to-date losses totalling a mere US$74,000, Geomaque Explorations (GEO-T) appears to be withstanding the industry downturn by keeping a close eye on costs at the San Francisco gold mine in northern Mexico.

The Toronto-based junior trimmed its cash costs to US$261 per oz. in the latest quarter ended June 30 from US$269 per oz. in the 1998 first quarter. Mine operating costs fell to US$4.94 per tonne of ore processed, owing to record crusher throughput of 875,000 tonnes — a 29% increase over throughput in the first quarter. Mine operating costs were US$5.78 per tonne in the 1998 first quarter, and US$5.36 per tonne in the second quarter of 1997.

The open-pit San Francisco mine turned out 12,681 oz. gold in the latest quarter ended June 30, slightly below the 13,161 oz. produced in the first quarter but well above the 9,470 oz. produced in the second quarter of 1997.

Geomaque reported a loss of US$181,000 for the latest quarter, which reflects a writedown of deferred exploration expenses of US$127,000 on two Mexican properties, plus foreign exchange losses of US$87,000. Cash flow was US$624,000, compared with US$888,000 a year earlier. During the latest quarter, Geomaque paid down the outstanding balance on its credit facility.

In Honduras, Geomaque is advancing the Vueltas del Rio gold deposit, now at the feasibility stage. The study is expected to be complete this fall. In the meantime, exploration programs are testing targets elsewhere on the property.